Content

Cloud computing has burst onto the commercial scene, affecting many industries. Generally defined as the hardware and software that supports transactions over a virtual network (i.e., the internet), cloud computing has a borderless quality that creates complexity for taxing jurisdictions.

Despite that complexity, governments are actively investigating and writing tax laws in this area, increasing the risk that taxpayers will be caught unprepared in some countries. TheOrganisationforEconomicCo-operationandDevelopment (OECD), for example, has specifically identified digital economy transactionsas an area where base erosion and profit shifting (BEPS) may occur and released a report under Action 1 of the BEPS Action Plan on addressing the tax challenges of the digital economy. A current guide like this one is all the more valuable in such a shifting tax landscape.

Each country chapter contains contact information for the key people in that country’s EY offices, two at-a-glance tables about the jurisdiction’s corporate tax and its VAT or GST. Then diagrams contemplate transactions according to three operating models: the commissioned agent, the commissionaire and the buy-sell models. Within each are high-level tax considerations regarding contractual terms that indicate lease/rental/license, sale or service arrangements. Then we discuss how these payments are taxed in four respects: income characterization, withholding tax, permanent establishment and indirect tax.

Feedback

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.